China's lower tier cities key to future

10 July 2013

SHANGHAI: China's lower tier cities contain a growing consumer class and increasingly optimistic and entrepreneurial young people, which taken together will drive not just national growth but the global economy.

But he also noted that the advertising and marketing spend on consumers in lower tiers was only around 4.5 times that on consumers in tier one cities, so "the potential is much greater than what most companies are thinking right now".

As well as the impact of sheer numbers, he observed that the past decade had seen a change in the attitudes of the young in such cities.

"The youth mindset has changed from almost a defeatist mindset to one that is far more optimistic," he said.

He argued that their greater exposure to other cultures and lifestyles, brought about by internet access, and the rise of ecommerce meant that they no longer felt left behind and that the only way to progress was to leave for a tier one city. They now thought they could get involved with creativity and make a difference.

"That's been a significant change," stated Sinha," and one of the ways it manifests itself is when we ask people about their desirable occupation: young people in fourth-tier cities are saying that they want to be entrepreneurs."

He contrasted this attitude with first-tier city youth who were more likely to find themselves working in multinational corporations and in technology or financial services.

"These are seen as sectors where they will perhaps get more opportunities, not just within China, but perhaps even overseas," said Sinha.

He also remarked on the greater emphasis on family values in the lower tier cities along with a greater affinity with nature and a more easy-going pace of life.

"Things are not as rushed as they are in the first tier cities, which allows them to explore a whole lot of interests and allows them to spend more time with the family," he said.